European Central Bank‘s Balance Sheet Shrinking Fast

8/4/2014 10:50AM

The ECB's balance sheet has shrunk by more than a trillion euros since 2012, draining cash from Europe's economy at at time when the Federal Reserve, the Bank of England and the Bank of Japan continue to take the opposite approach. Neil King joins joins MoneyBeat. Photo: Getty Images.

This transcript has been automatically generated and may not be 100% accurate.

... been been been been been ... the European Central Bank dictates of time to go on inside the central banks around the globe have been pumping one money into their financial systems ... the ECB is Velshi has shrunk by more than a trillion euro since twenty twelve ... with worries about the fleeces swirling is the ECB taking the right strategy ... Wall Street Journal's global Economics Editor Neil King joins MoneyBeat from Washington DC ... Mailbag so much for being here ... so email it seems like with all the central bank pumping money into financial systems the ECB is doing the opposite why is that ... well here ... the various countries including Japan for instance the UK due ... euro ... by going on the other is ... to keep inflation from falling too low an interest in China to economic growth going a little bit faster ... in your op about living with them is the overall lead and work my unsuccessfully at the moment because inflation is still well under one percent and a half percent ... of the smartphone us ... and in Japan the UK on fire was and still ... be around two percent ... in those countries that are running a much higher ... been ... been a lot more money into the economy is ... the euro the ECB ... of the numbers really on the chart with a sense when it overriding reasons raise a lot of concern ... among economists among the high end of ... the Europeans should be putting more money and uses them ... taking out ... right and so that's the big debate going on right now I guess that in terms of the ECB ease current strategy rate now what are the positives of one of the negatives ... well ... Friday's know maintain its ... lost their DNA ... a lot fewer livers than that ... with friends ... been been doing it ... one that is using for so long ... um when the issues are ... you know there's just much during heroes walking around this isn't ... the optimal ... and there's a lot of concern that the inflation rate could continue to fall down and could even go into negative numbers ... the problem in euro in part as the European Central Bank of a lot less control over the Yankees as in prior uses a lot of things around ... on your own benching ... years ago early and ... one of the reason ... it ... shouldn't fall on the present ... was strongly pro ... we have a graphic here that we're going to show that looking at how five B Mukasey rate that Matson possible when it passes on balance sheets this is the percentage of GDP so eight percent for the ECB has invested twenty six percent for the Fed and more than fifty percent for the Bank of Japan so ... I'm you know I guess is that the question you are a kind of touched on this but with worries about inflation swirling around what else that the ECB needed to to combat that ... will it ... start next month in September ... easy to ... lose my picture doesn't really in Europe ... it uses in various forms of auto loans to banks the euro zone ... with one proviso being ... those basic sure to ramp up limited commercial and they only about money The banking system ... will then go to the wire of business and barman around ... bureaucrats really or so ... it is the state and we have some things coming up short in mind that there were ... no came from Washington thank you so much for joining us ... why are they ... and I'm Steber slow thanks for watching MoneyBeat